Before : |
Sir Michael Birt, Kt., Bailiff, sitting alone. |
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Between |
Volaw Trust & Corporate Services Limited |
Appellant |
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And |
The Officer of the Comptroller of Taxes |
First Respondent |
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And |
The Chief Minister |
Second Respondent |
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And |
The States of Jersey |
Third Respondent |
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Advocate A. D. Hoy for the Appellant.
Advocate H. Sharp, Solicitor General for the Respondents.
judgment
the bailiff:
1. The matter before me today follows on from an application for judicial review by Volaw Trust & Corporate Services Limited and various other companies where I granted leave to apply. That application related to nine notices issued by the Comptroller under Regulation 3 of the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 ("the Regulations"). At that time I was also asked to grant a stay on compliance with the notices. In doing that I had to consider the provisions of Regulation 14(3) of the Regulations in their recently amended form. Regulation 14(3) reads:-
"(3) Despite any application for judicial review being made -
(a) a taxpayer or a third party shall provide the competent authority for Jersey the information requested in the notice served under Regulation 2 or 3, as the case may be, within the time limits specified in the notice; but
(b) the competent authority for Jersey shall not provide to the competent authority for the third country the tax information obtained under these Regulations unless -
(i) the application is dismissed,
(ii) the application is withdrawn or discontinued, or
iii) the competent authority for Jersey is permitted to do so by the Royal Court."
2. As I say, I was requested to in effect dis-apply that provision because its vires and validity were being challenged in the judicial review proceedings. In a judgment dated 25th November, Larsen and Volaw Judicial Review [2014] JRC 232 I refused to do that. As a result Volaw came under an obligation to comply with the notices which had been issued. Volaw did comply with those notices to the extent that, following my judgment, it delivered a number of CD's containing what it asserts is the information requested. However, the CD's were encrypted. Volaw made this clear to the Comptroller. It said that it was retaining the key file and pass-phrase and it would only supply these in the event of one of the trigger events in Regulation 14(3)(b) being satisfied, in other words the judicial review ending in favour of the Comptroller.
3. Volaw has now applied for further interim relief in that it has asked that I give leave for it to retain the key file and pass-phrase until one of the trigger events referred to or until further order. The Comptroller, on the other hand, has insisted that the key and pass-phrase must be provided so that the Comptroller may have access to the material. There is a Regulation in the Regulations which deals with this and that is Regulation 10B(2)(b) which provides as follows:-
"(2) Where tax information is recorded in electronic or magnetic form, the person required by notice under Regulation 2 or 3 to provide that information shall -
(a) provide it in the form required by the notice; and
(b) in the case where the notice requires it to be provided in electronic form, provide it in a form that is readily accessible and capable of being produced in a visible and legible form."
4. The Comptroller asserts that Volaw has not complied with sub-paragraph (b) because the information is not readily accessible in the absence of the key and the pass-phrase. On the face of it that is a compelling submission.
5. Advocate Hoy, on the other hand, submits that that provision must be read in context. He says that the Comptroller does not need to have access to the material at present because there is no obligation on the Comptroller to vet the nature of the material supplied pursuant to a notice; he is simply entitled to pass it on to the requesting authority, in this case the Norwegian Tax Authority. Similarly the Norwegian Tax Authority does not need to have access to the information at present because it is not entitled to see it until the occurrence of one of the trigger events in Regulation 14(3)(b), in other words that the judicial review proceedings are terminated in favour of the Comptroller.
6. I am afraid I cannot accept that submission by Advocate Hoy. As the Solicitor-General rightly says, the Comptroller must be in a position to see whether a notice has been complied with. No-one is suggesting that Volaw has done anything than comply with the notices on this occasion but, suppose that on another occasion the full information has not been provided; the Comptroller needs to be able to ascertain that, so that he can take enforcement measures to make sure the information is available even whilst judicial review proceedings are continuing. That is clearly the whole intention of Regulation 14(3) when read with Regulation 10B.
7. Accordingly I hold that Volaw must provide the key file and pass-phrase. The protection for Volaw and its clients continues to be the provisions of Regulation 14(3)(b), namely that the Comptroller is not allowed to pass this information on to the Norwegian Tax Authority until the judicial review proceedings are completed.
8. I make the order that Volaw must supply the key and pass-phrase by close of business today. This is an ex-parte application, albeit that the Comptroller has been heard; so I will not make any orders as to costs.
Authorities
Taxation (Exchange of Information with Third Countries)(Jersey) Regulations 2008.